Real estate contract deadline
You fly to the United States, look at various properties with your real estate agent, and finally sign a purchase contract . The financing contingency clause in it will be completed by your real estate agent. By completing the financing contingency clause (entitling you to withdraw from the contract if financing is not feasible) in the purchase contract you are taking the right step. However, here you also indicate the period of time you have to submit a loan application for financing. In general, this period of time is made up of five days after the signing of the contract.
Our recommendation: Contact us before your search for your home. In this way we can prepare everything and we can offer you a mortgage “pre-approval” before your trip, which can verify your creditworthiness for a specific amount, purchase price and loan. This will also be necessary when submitting an offer for a property. If you have filled out our questionnaire for a pre-approval, we have all the necessary information for your loan application and can start processing immediately. If you have not, please contact us for a free, no obligation pre-approval and we will forward the questionnaire to you. This always saves a lot of time.
Period of time for the loan commitment
According to the purchase contract an approval by the bank can be expected within 20-30 days.
Our recommendation: We contact your real estate agent in order to set the deadline ahead of time. The more detailed these advance communications are, the more relaxed the actual process will be.
The Closing Date
The most important day of the entire transaction. On this day the property will be transferred to you and your financing period will begin. The closing date is established in the contract from the beginning and it is important to comply with it. If you have to change this it has to be created in accordance with the contract and the change has to be signed by the seller and the buyer.
Our recommendation: In order to satisfy the interests of all parties involved, which means giving the seller the closest possible date while giving the buyer enough time for the financing process, an agreement on a realistic deadline. it has to be achieved. We recommend at least 30 to 45 days, if possible 60 days. Your real estate agent can add the account to the date “at the latest.” With this you can set a binding deadline; However, it offers that one can close even before the date is reached – as soon as the financing is complete.
Deadline for processing the financing
This is the time frame of the application until closing. Generally this time frame takes approximately 4-6 weeks. Different factors are crucial: Are you as a borrower going to get the necessary documents immediately or do you already have them? Will you be in the US during the closing time or will you sign the closing documents in your home country?
Loan maturity is the end of your loan or technical way to express the duration of the loan. This is the set time that your loan payments are amortized based on, that is, the process by which the principle of the loan is reduced over the life of the loan. In almost all cases, this period is 30 years.
In contrast to most other countries there are very few loan models in the US that include prepayment penalties. Without a payment penalty, you have the option of paying off your loan in whole or in part at any time – with no penalties. This means that the actual maturity of the loan can be determined by you.
The period during which the interest is calculated by the lender. There is a wide range of programs that can be 3, 5, 7, 10, 15 and 30 years. The interest periods should be considered as totally independent of the maturity of the loan.
There are many options and documents that are valid only for a certain period of time. The loan commitment, for example, is only valid for 30 days, with some banks in the United States. If the closing does not occur within this period, new conditions may be imposed. The appraisal of the market value of a property, which is established in the framework of the financing, is valid for six months.
Deadlines to lock in the interest rate
During loan processing the borrower has the right to let the interest “float” up to 5-10 days before closing; rates may vary from day to day. However, for most US banks this is only possible after the financing application process has started. 15, 30, 45, or 60 days of interest protection is common, and during this period the closing should happen. With the possibility of extension according to the latest conditions, but the bank can impose a sanction in order to do so.
Consultations in advance are always FREE. As a foreigner you should definitely take advantage of this offer so that you can inform yourself about all the different options you have, the most important deadlines, the necessary documentation and the individual steps beforehand!